Indonesia shakes Asia power mix

Utilities across Asia are scrambling to plug a potential shortfall in critical coal supplies after miners in the top global coal producer, Indonesia, halted spot coal exports in protest over government proposals to limit output.

- Gavin Maguire

This file photo shows a tug boat pulling a coal barge along the Mahakam River in Samarinda, East Kalimantan province, Indonesia.

(REUTERS)

An Indonesian coal mining official said that exports tied to long-term contracts would be maintained, but that spot shipments would be “limited until a final decision is made on the government quotas”. The official also warned that even some term contracts are at risk as miners face unforeseen circumstances.

Indonesia supplied half of all global thermal coal exports in 2025, and is by far the top coal supplier to many of the world's largest coal importers, including China, India, Vietnam and the Philippines.

However, an extended stretch of weak global prices has spurred Indonesia's government to propose production cuts and quotas in a bid to drive up export prices and tax revenues.

Indonesian mining firms have also threatened layoffs and mine closures as a result of any forced output cuts, which has put the government under pressure to forge a compromise before mining activity and export flows grind to a halt.

The authorities have proved willing to play hardball with the mining sector before, and briefly suspended coal exports in 2022 due to a shortage of coal supplies at local power plants.